SEC Commissioner Hester Peirce Speaks at California Western

Dean Niels Schaumann and Professor James Cooper welcomed Hester M. Peirce, Commissioner of the Securities and Exchange Commission (SEC), to California Western last week.

Commissioner Peirce spoke as part of California Western’s Emerging Technologies and the Law Speaker Series organized by Professor Cooper. One of five SEC commissioners, Peirce was appointed by President Donald Trump to the SEC, confirmed by the U.S. Senate, and sworn in on January 11, 2018.

Referencing her regulatory background, Hon. Peirce began by acknowledging that markets are really good at self-regulating, at ferreting out bad actors and forcing disclosure.

“With a lot of the things that we do as an agency, we need to think first before we take a step,” said Hon. Peirce. “We need to think, is this a problem that the markets will fix on their own, and if it is, will they fix it quickly enough that we can stand down.”

Recognizing the vital role that the SEC plays in going after securities fraud, Hon. Peirce stated that the Commission also helps to make a disclosure framework that is effective in getting information to the public.

“I think it's important for us to ask ourselves the question, is our role in this particular sphere necessary or can we allow the market to work it out themselves,” said Hon. Peirce. “Markets tend to be more flexible than regulators are,” she added. “We tend to put rules on the books, and it gets very hard to take them off the books.”

Hon. Peirce then opened up the discussion, inviting questions from the audience, in particular what the role of the SEC should be and what the agency could do better.

To date the SEC’s stance on cryptocurrency as a security remains vague. Unsurprisingly many of the attendees posed questions on the subject expressing their frustration.

Cryptocurrency is a space in which Hon. Peirce is well known, having earned the nickname “Crypto Mom”—a name ascribed to her following her remarks dissenting a decision by the SEC to reject an exchange-traded fund offering bitcoin as the underlying asset.

Hon. Peirce admitted she loved her nickname. “I thought the reasons for disproving it [the fund] were not founded in our regulatory and statutory framework, so I dissented from that,” explained Hon. Peirce. “That dissent earned me the name Crypto Mom, so I embraced it. I'm not a mom, and I figured if this was the way I will become one, so be it.”

However, Hon. Peirce went on to say that she was not advocating for or against any particular area, including cryptocurrency.

“I want capital to flow to places where it will do the most good for our society, and so I try to open the doors to all entrepreneurs no matter whether it's crypto or biotech or artificial intelligence,” said Hon. Peirce.

“That’s the challenge of being a regulator in this space because what we do at the SEC matters so much for how the rest of the economy can develop.”

Following her remarks, Hon. Peirce attended a reception in the Castetter Courtyard where she was able to talk informally with California Western students, faculty, and guests. “It was great to have such a fan of innovations and smart regulations here at the law school,” stated Professor Cooper. “Commissioner Peirce is a great advocate for advances in FINTECH.”

California Western’s popular Emerging Technologies and the Law Speaker Series continues in the coming months with the Hon. Jason Hsu, the “Crypto Congressman” of Taiwan.